The 30-year fixed rate mortgage fell 2 basis points this week, Freddie Mac said, but other sources like Zillow and Lender Price reported larger drops.

Fannie Mae economists toned down their housing and economic outlook in August, predicting fewer home sales and less mortgage origination volume versus July.

The 30-year fixed rate mortgage fell by 5 basis points, with the Consumer Price Index showing muted inflation and jobs data still influencing the market.

The 30-year fixed rate stayed within a narrow range throughout most of July, with forecasts likely to leave the housing market "stuck," said one economist.

Federal Reserve Chair Jerome Powell said during his regular press conference Wednesday that the process of determining tariff-related price increases was always going to be slow, but it has taken longer than he expected.

Mortgage rates rose this week as investors priced stronger than expected inflation and jobs affecting Fed moves into the 10-year Treasury.

Mortgage lenders offered more cash-out refinance programs at a time when consumers might be coming to terms with the rate environment.

While the government-sponsored enterprise cut its origination forecast for this year, the Mortgage Bankers Association's updated forecast was unchanged from its October prediction.